(Alliance News) - Bens Creek Group PLC on Thursday said MBU Capital Group Ltd exercised its right to convert the full outstanding amount of its loan facility provided to Bens Creek for new shares.
The mining company focused on North America said it agreed to vary the conversion price of the proportion of the loan facility to 30.00 pence from 60.00p.
Shares in Bens Creek were up 1.3% to 20.26p each in London on Friday afternoon.
MBU will receive 23.3 million new shares following the conversion, taking its total interest to 213.9 million shares, or 54% of Bens Creek's voting rights.
Before its initial public offering in October 2021, Bens Creek said MBU provided it with a loan facility of up to GBP10 million. Subsequently, Bens Creek explained utilising the loan facility became "unattractive", as its share price rose considerably, peaking at 104p in April 2022.
As a result, Bens Creek and MBU agreed variations to the loan facility's terms while reducing its total amount.
This involved increasing the conversion rate fourfold to 60p from 15p, although reducing the amount convertible at this rate to GBP1.7 million from GBP5.3 million. A further GBP2.6 million would be convertible at 15p.
Since Bens Creek's share price has since fallen, both companies on Thursday agreed to amend the conversion price of 60p on the GBP1.7 million outstanding amount to 30p, while MBU also exercised its right to convert the total outstanding amount of GBP4.3 million, including accrued interest, into new shares.
The loan facility will remain in place until June 30, although Bens Creek intends for no amounts to be drawn down post-conversion.
"We are very pleased with our progress to date and our ability to remove substantial levels of debt from our balance sheet which in turn will bring cash flow improvement taking us nearer towards being able to provide a maiden dividend for our shareholders," said Chief Executive Officer Adam Wilson.
On Monday, Bens Creek also agreed repayment terms with its lender ACAM LP regarding USD6 million in outstanding unsecured convertible loan notes.
Under the repayment plan, Bens Creek said it would make a USD250,000 payment to ACAM on or before Tuesday, with subsequent monthly repayments to be made from operational cashflow.
It expects this will result in the full repayment of USD6 million plus accrued interest by the end of the summer this year.
This refers to a second set of convertible loan notes. Following repayments, ACAM will still hold USD6 million of convertible loan notes, referring to the first set announced in mid-December.
By Greg Rosenvinge, Alliance News reporter
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